Payday Loans Rated Unhealthiest Form of Credit
March 27, 2018
Payday loans have been cited as the unhealthiest form of credit that consumers can currently gain access to by a leading health education charity.
According to a report produced by the Royal Society for Public Health (RSPH), payday loans tend to have negative effects on the mental health of borrowers more often than any comparable form of credit.
Hundreds of borrowers were asked to reflect on their feelings towards different forms of credit by the charity, with payday loans topping the list of the least healthy, followed by unauthorised overdrafts, doorstep loans and weekly payment stores.
Perhaps unsurprisingly, the forms of credit rated as having the least negative effects on borrower health were those which tend to be the most affordable, including loans provided by credit unions.
In its report, the RSPH describes the UK’s high cost credit sector as “burgeoning” and says it is having a significant impact on social connections and the mental wellbeing of people throughout the country.
The charity also suggested that the poorest people in society are routinely denied access to affordable forms of credit and obliged to pay more than most for essential goods and services.
The RSPH’s report ultimately calls for action to be taken by relevant authorities and lawmakers to bring an end to the marketing of high cost credit to vulnerable people in society.
“It is now all too commonplace to see people in desperate situations, often with low incomes and insecure employment, forced into taking out loans with punishingly high interest rates as the only way to make it through to the next pay cheque,” commented Shirley Cramer, chief executive of the RSPH.
“This system forces the most vulnerable in our society further into an inescapable spiral of debt – with all the accompanying damage to health and wellbeing, as illustrated by our report, that goes along with it.”
If you live anywhere in Scotland and you’re concerned about problems with payday loans or any form of debt then Scotland Debt Solutions can help. You can contact us directly to arrange a FREE and confidential consultation.